Scotland Limited 2018 - Grant Thornton UK LLP · 4 Scotland Limited 2018 In 2014, Grant Thornton...

Scotland Limited 2018 1

Scotland Limited 2018

Scotland’s business landscape

February 2019

2 Scotland Limited 2018

“Scotland Limited 2018 offers a degree of optimism and reassurance. The top 100 companies have all demonstrated that our country’s economy is diverse, robust and resilient.”Andrew HowieManaging Partner, Scotland

Andrew joined Grant Thornton in 2005 as an Audit Partner, and now oversees the leadership of our three office locations in Scotland.

His extensive experience includes working with some of the country’s best-known, internationally focused brands, helping them unlock their potential for growth and achieve their global strategic goals.

Andrew’s leadership role provides him with a truly unique, broad-ranging view of Scotland’s business environment. Read Andrew’s full analysis in ‘What now for Scotland?’ on page 30.

Andrew Howie Managing Partner T +44 (0) 788 763 5177 E [email protected]


Contents

About Scotland Limited 4

Meet the experts 6

Scotland’s top 100 companies 8

Key data and findings 10

Regional analysis of Scotland’s top 100 companies 12

Sector focus: Food and drink 14

Sector focus: Real estate and construction 18

Sector focus: Manufacturing and industrial 22

Sector focus: Energy and natural resources 24

Industry analysis 28

What now for Scotland? 30

About Grant Thornton 31


In 2014, Grant Thornton launched the first ever Scotland Limited report. The objective of Scotland Limited is to identify the country’s top 100 limited companies, and explore what lies behind their position as Scotland’s most dynamic, fastest growing businesses. Our report is now an annual exploration of the 100 most successful private companies, providing us with a yardstick against which the country can assess its economic performance, and businesses can benchmark themselves against their peers.

Our methodology explainedScotland Limited 2018 is compiled using the most recent publicly available accounts (as of 1 September 2018) of Scotland’s best performing private businesses based on a hybrid measure of data, which includes turnover and EBITDA (Earnings before interest, tax, depreciation and amortisation). The report excludes companies that are listed, owned by listed businesses or the subsidiaries of companies from the rest of the UK or overseas. We have then analysed the aggregate financial data of these companies to gain an insight into the shape and performance of this important part of the Scottish economy, and one which is fundamental to generating prosperity and employment in the country.

In our findings, we have categorised companies by sector and location. We have also compared our data with previous Scotland Limited results. This is to provide an insight into economic trends and to give a more detailed understanding of how various industries are performing. Inevitably, there is a time delay between the availability of the data used and the presentation of this report. However, we have worked hard to create parameters and measurement tools that produce as accurate a snapshot of Scotland’s business landscape as possible.

About Scotland Limited

Scotland Limited 2018 5 Buckinghamshire Limited 2018 5

Royal Mile, Edinburgh


Meet the experts

Vishal Chopra Head of Tax T +44 (0) 785 090 7761 E [email protected]

Vishal is based in Glasgow and leads the Tax team across Scotland.

With his international remit, he works with businesses of all sizes and across a range of sectors.

In an increasingly global world, a growing level of international tax support is needed and Vishal works closely with Grant Thornton colleagues around the world to ensure tax positions are properly managed and optimised. His focus covers both tax compliance and advisory including M&A, cross-border tax matters, and encompasses a holistic approach at both a company and shareholder level. In Scotland Limited 2018, Vishal will analyse current market conditions in Glasgow and throughout the West of Scotland.

Stuart Preston Head of Restructuring T +44 (0) 781 448 6424 E [email protected]

Stuart leads Grant Thornton’s restructuring and forensic investigation work in Scotland, gaining almost two decades of experience working with firms at crucial points in their business journey, including those in property and construction, food and drink, oil and gas and manufacturing and industrial.

Working closely with leaders, management and key stakeholders of businesses throughout the restructuring process, Stuart is able to give his insight into the challenges and opportunities facing Scottish businesses today.

In Scotland Limited 2018, Stuart will analyse current market conditions in Edinburgh and throughout the East of Scotland.

James Chadwick Head of Food & Drink T +44 (0) 781 388 0137 E [email protected]

James joined Grant Thornton in 2004 and has developed an enviable reputation for his work with Scotland’s internationally renowned whisky sector. As Head of Food and Drink in Scotland, James works closely with leading businesses, including beverage manufacturers, retailers, and bars and restaurants.

Since the launch of Scotland Limited in 2014, food and drink has dominated the rankings, highlighting its growing importance to the national economy. In this report, James will provide his own insight-led analysis of the data, exploring the secrets behind the success of the industry group and any opportunities or threats ahead in 2019.

Heather Smallwood Head of Global Mobility Services T +44 (0) 778 789 1141 E [email protected]

Heather leads Grant Thornton’s global mobility services team in Scotland and has more than 22 years’ experience assisting a wide range of businesses with their UK and international employment tax-related issues. Based in Aberdeen, Heather has a particular interest in the oil and gas sector but has worked with many companies from other industry sectors including food and drink, manufacturing and transport.

In Scotland Limited 2018, Heather provides analysis of current market conditions in the ‘Granite City’ and throughout the North East of Scotland.


To provide you with a full, in-depth analysis of our data, we have worked with industry leaders throughout Scotland, who share their own insight into the secrets behind the growth of the country’s top 100 private companies. This includes experts here at Grant Thornton, who have explored the figures and trends in-depth, to offer their own take on the strengths, challenges and opportunities facing Scotland right now.

Lorraine Macphail T +44 (0) 797 713 9794 E [email protected]

Lorraine leads Grant Thornton’s real estate and construction team in Scotland, advising and working in collaboration with a range of companies, including house builders, landowners, and commercial property developers.

The sector often acts as a bellwether for the wider Scottish economy, reflecting fluctuations in consumer spending, investment in major public infrastructure projects, and changes in legislation.

After gaining decades of experience working within the field, Lorraine offers her views on the data and any clues it may offer for the prospects of an industry that provides extensive employment and economic output throughout the country.

Anita Eunson Head of Employer Solutions T +44 (0) 791 939 7044 E [email protected]

Anita leads Grant Thornton’s employer solutions team in Scotland, providing advice on all aspects of UK employment tax and employee incentives, and assisting companies with their mobile workforce.

Her clients range from large companies to private-equity-backed or owner-managed businesses. Anita’s role takes her across Scotland, providing her with unrivalled knowledge of the challenges facing the business community.

In Scotland Limited 2018, Anita provides a summary of the manufacturing sector – an industry which has witnessed long-term decline, followed by a recent period of renaissance and a commitment from government and the private sector to re-invest and re-build.

Neil McInnes Head of Corporate Finance T +44 (0) 797 067 8554 E [email protected]

Neil is responsible for leading Grant Thornton’s M&A advisory and transaction advisory service offerings in the Scottish market. He has over 16 years’ experience advising corporates, banks, private equity houses and other investors achieve their strategic ambitions.

2018 was a record year for deal making in Scotland for Grant Thornton, culminating in Neil’s team being recognised as Deal Team of the Year at the Scottish Business Insider Deal & Dealmaker Awards 2018. Neil will explore what 2019 may hold for companies and shareholders planning transactions and what trends he expects to see emerging.

Barry Fraser T +44 (0) 782 790 2432 E [email protected]

Barry leads our energy and natural resources sector group in Scotland.

Barry has worked in corporate finance for over 20 years, in Aberdeen, Edinburgh and London, gaining significant experience advising some of the UK’s leading companies.

After a severe downturn, there are real signs of improvement in the energy industry, which is rebuilding and regaining lost ground. Barry will explore some of the trends in our Scotland Limited 2018 data, building a picture of what lies ahead for what remains the country’s most economically important sector.

Head of Real Estate & Construction Head of Energy & Natural Resources


Scotland’s top 100 companies

1 Arnold Clark Automobiles Limited

2 William Grant and Sons Holdings Limited

3 Kcad Holdings I Limited (KCA Deutag)

4 The Edrington Group Limited (Edrington)

5 Miller Homes Limited

6 Park’s of Hamilton (Holdings) Limited

7 The Edinburgh Woollen Mill (Group) Limited

8 City Facilities Management Holdings Limited

9 Alexander Dennis Limited

10 Robertson Group (Holdings) Limited

11 EnerMech Limited

12 Farmfoods Limited

13 Ogilvie Group Limited

14 Forth Ports Limited

15 The Malcolm Group Limited

16 GEG (Holdings) Limited

17 Edinburgh Airport Limited

18 W.A. Baxter and Sons (Holdings) Limited

19 GAP Holdings Limited

20 Eastern Holdings Limited

21 Asco UK Limited

22 John Clark (Holdings) Limited

23 Peter Vardy Holdings Limited

24 James Jones and Sons Limited

25 Turner and Co. (Glasgow) Limited

26 BSW Timber Limited

27 Castle View Ventures Limited

28 J.R. Dalziel Limited

29 Macdonald Hotels Limited

30 North Star Holdco Limited

31 R.J. Mcleod (Contractors) Limited

32 J.W. Galloway Limited

33 James Walker (Leith) Limited

34 HFD Group Limited

35 Cruden Holdings Limited

36 Albert Bartlett Holdings Limited

37 G1 Group (Holdings) PLC*

38 Browns Food Group Limited

39 Mackays Stores Group Limited

40 Balmoral Group Holdings Limited

41 Sinnalba Group Limited

42 Scottish Leather Group Limited

43 Lunar Fishing Company Limited

44 D.C. Thomson and Company Limited

45 The Anderson Group Limited

46 Scott Group Investments Limited

47 Gray and Adams Holdings Limited

48 Forth Holdings Limited

49 Orion Engineering Services Limited

50 Advance Construction Group Limited

*These companies are plcs in name only. The businesses are privately held and their shares are not traded on a public market.


51 Dingbro Limited

52 Ian Macleod Distillers Limited

53 Peoples Limited

54 John Lawrie (Aberdeen) Limited

55 James Donaldson and Sons Limited

56 Mactaggart and Mickel Group Limited

57 Allied Holdings (UK) 2014 Limited

58 Apex Hotels Limited

59 James Johnston and Co. of Elgin Limited

60 Walkers Shortbread Limited

61 Jacobs and Turner Limited

62 Leiths (Scotland) Limited

63 C C G (Holdings) Limited

64 Dobbies Garden Centres Limited

65 Brewdog PLC*

66 Tillicoultry Quarries Limited

67 Braid Group (Holdings) Limited

68 HMS (485) Limited (Kent Foods)

69 Patersons Quarries Limited

70 Kettle Produce Limited

71 Search Consultancy Limited

72 The Harbro Group Limited

73 Farne Salmon and Trout Limited

74 Enva Scotland Limited

75 Forsyths Limited

76 Hillhouse Estates Limited

77 Richard Austin Alloys Limited

78 John G. Russell (Transport) Limited

79 Morris Leslie Limited

80 E.G. Thomson (Holdings) Limited

81 Glenrath Farms Limited

82 Score (Europe) Limited

83 Trac International Limited

84 Mccurrach UK Limited

85 Ethigen Limited

86 Hydrasun Limited

87 Caledonian Heritable Limited

88 Axle Group Holdings Limited

89 Klondyke Group Limited

90 Macphie Limited

91 Dusty TP Limited (Peak Scientific)

92 Speymalt Whisky Distributors Limited

93 Thomas Tunnock Limited

94 Tulloch Homes Group Limited

95 McAlpine and Company Limited

96 Grahams The Family Dairy Group Limited

97 Meallmore Limited

98 Muir Group Public Limited Company

99 Zonal Retail Data Systems Limited

100 Verus Petroleum Holding Limited


Key data and findings

Sector Count

Total turnover

(£’000)

Total EBITDA (£’000)

Total profit before

taxation (£’000)

Total number of

employees

Total remuneration

(£’000)

Food and drink (inc. leisure) 24 4,742,271 859,384 647,747 23,875 774,626

Real estate and construction 15 2,966,956 412,944 284,294 11,674 471,598

Manufacturing and industrial 14 1,577,000 153,988 108,668 8,861 283,174

Energy and natural resources 11 2,475,981 296,588 (9,881) 14,785 657,515

Automotive 11 7,951,479 439,156 206,011 24,235 777,803

Transport 8 1,285,364 298,746 219,095 7,621 267,368

Retail 7 1,787,867 159,908 126,993 22,034 313,944

Business support services 6 1,389,642 80,897 71,189 20,795 456,516

Healthcare, pharma and biotech 2 227,657 11,432 6,350 1,781 35,905

Media 1 277,036 8,175 38,108 2,122 79,786

Technology 1 54,279 5,340 4,017 451 20,337

Total 100 24,735,532 2,726,558 1,702,591 138,234 4,138,572


Arnold Clark Automobiles

Limited

01*

261,997William Grant and

Sons Holdings Limited

02

1,188,138William Grant and


02

187,000The Edrington Group Limited

04

864,887Kcad Holdings I

Limited (KCA Deutag)

03

135,817Arnold Clark

Automobiles Limited

01

821,672City Facilities Management

Holdings Limited

08

98,700Miller Homes

Limited

05

777,060Park’s of Hamilton (Holdings) Limited

06

80,600The Edinburgh

Woollen Mill (Group) Limited

14

3,931,414

Top 5 companies by turnover (£’000)

Top 5 companies by operating profit (£’000)

11,992City Facilities Management

Holdings Limited

08

11,427Arnold Clark

Automobiles Limited

01

10,195The Edinburgh

Woollen Mill (Group) Limited

07

6,416Castle View

Ventures Limited

27

6,117Kcad Holdings I Limited (KCA

Deutag)

03

Top 5 companies by number of employees

* Top 100 rank

353,725William Grant and


02

276,083Arnold Clark

Automobiles Limited

01

240,000The Edrington Group Limited

(Edrington)

04

152,566Kcad Holdings I Limited (KCA

Deutag)

03

128,300Miller Homes

Limited

05

Top 5 companies by EBITDA (£’000)


Regional analysis of Scotland’s top 100 companies

From Turriff to Troon, the top 100 limited companies are spread throughout the country, reflecting the growing diversity and increasing regional spread of Scotland’s economy. Our analysis highlighted Glasgow as the top city in our top 100, for the fourth year in a row, closely followed by Edinburgh and Aberdeen. Our experts offer their insight into the trends overleaf.

North

5 companies

North East

25 companies

West

42 companies

East

23 companies

South

5 companies


West of Scotland Vishal Chopra, Head of Tax“Over the last three years, Glasgow has taken the top spot in Scotland Limited, despite the number of companies listed gradually declining from 26 in 2016 to 21 in 2018. The city has so much to be proud of, with a relatively young population and home to a number of leading higher education institutions. The city has transformed itself from one in post-industrial decline, to a global financial centre and a home for new vibrant businesses and entrepreneurship. Glasgow isn’t just Scotland’s population centre, it is also an economic powerhouse with growth in job creation and an increasing interest from businesses undertaking R&D projects. The businesses included in this year’s rankings cover a range of sectors, further enforcing the level of diversity that can be seen in the West of Scotland. However, challenges that have long plagued the city – from health problems to trust and safety – need a more collaborative, proactive approach to ensure it remains the biggest and one of the best places to do business in Scotland. Continued investment in capital will also help to ensure the region continues to thrive in future years.”

East of Scotland Stuart Preston, Head of Restructuring“Recognised as Scotland’s ‘most vibrant place’ in Grant Thornton’s Vibrant Economy Index1, published in September 2018, Edinburgh continues to flourish on the world economic stage. The city continues to outpace most other regions of the UK for growth. While Scotland’s capital plays host to scores of international businesses, our Scotland Limited research highlights the important role that many Scottish private limited companies continue to make to the area’s economy. An essential part of any sustainable, successful local marketplace is diversity, and our latest data paints a positive picture of the East of Scotland. Local businesses from our top 100 cover a wide range of sectors, from house builders to hotels, and food producers to financial and legal specialists. While 2019 looks set to be a challenging year, the local climate, and the region’s wide variety of sectors, will go some way to mitigating these risks. Well managed, financially sound businesses may even be in a strong position to embrace the opportunities that future disruption will undoubtedly create.”

North East of Scotland Heather Smallwood, Head of Global Mobility Services“For some time now, Aberdeen has been synonymous with the global economic crisis triggered by the crash in the oil price four years ago. We witnessed significant job losses and investment in new projects, construction and talent and skills all stalled. But the hard work of recent times is finally beginning to pay off. Scotland Limited 2018 recognises that achievement. The report shines a light on the many companies that have overcome the recent energy challenge, and are now reaping the rewards with increased profits, rising salaries and better long-term prospects. While energy firms continue to dominate our local economy, there are other vital industry groups – such as food and drink, real estate and construction, and non-energy focused manufacturers. Our region is highly interconnected with businesses collectively sharing in the success or failure of current market conditions. Political uncertainty around the world plays a major role in the fortunes of the North East of Scotland. But, a greater focus on innovation and collaboration has helped to create a more robust region that feels better equipped to cope with future economic disruption. We’re not out of the woods yet, but there is a sense of cautious optimism in the ‘Granite City’.”

1. To read more about Grant Thornton’s Vibrant Economy Index, including a full analysis of each region in Scotland, go to www.grantthornton.co.uk/scotland

Aberdeen harbour


“The food and drink sector has had something of a party for the last few years. Transforming Scotland’s global reputation and developing a brand based on quality and provenance. The sector has demonstrated what can be achieved by having a clear focus on coordinated and collaborative growth – the creation of a single international brand, offering a platform for businesses of all sizes to access the international marketplace. International growth will be challenging during 2019 as we see the full impact Brexit will have on supply chains and businesses’ ability to meet the needs of an increasingly global consumer base. This is also set against the changing landscape of the UK grocery market which is set to once again see upheaval in the next 12 months. The sector has shown over recent years its ability to deal with these challenges and I am confident we’re in a strong position to weather the obstacles ahead and continue to drive wider long-term sustainable growth in the Scottish economy.”

Sector focus: Food and drink

24 companies

23,875 employees

£859m EBITDA

The country’s food and drink sector has consistently dominated the list of top 100 companies. 2018 has been an overwhelmingly successful year for the wide and varied industry with rapid growth, consolidation and a relentless focus on international opportunities.

The total number of companies this year is down. However, only slightly – from 25 in 2017 to 24 in 2018, while the combined number of employees has dropped from 24,552 to 23,875. But, the main marker of success is profitability, and total EBITDA in 2018 amounted to more than £859m – up from just under £720m in 2017.

James Chadwick, Head of Food and Drink, Scotland

William Grant and Sons Holdings Limited1 The Edrington Group

Limited (Edrington)2 W.A. Baxter and Sons (Holdings) Limited3


Scotland’s farming, fishing, food and drink industry remains ambitious for the future. It is therefore no surprise to see food and drink come out as the top sector in this year’s report, once again. It is Scotland largest manufacturing sector, one of the best performing domestic sectors of Scotland’s economy and its been the fastest growing export in recent years. Interestingly, our manufacturing base in Scotland has been growing at twice the pace of the UK average for food and drink. One of the single biggest reasons for that has been the collaboration now forged between different sectors of our industry and government in Scotland. We are unified behind “Ambition 2030”, our strategy to make our sector worth £30 billion by that date. To unlock that potential, we need to invest in innovation, skills and our supply chain and, crucially, use Scotland’s ever strengthening brand identity to exploit markets at home and abroad.

However, whilst the story over the last decade has been one of growth, there remains real challenges on the immediate horizon. Brexit has the potential to be one of the most disruptive events to hit our industry in a lifetime. The hope remains that logic triumphs over divisive politics at Westminster and we neither make our largest international market more difficult to do business with, nor turn off the pipeline of talented EU workers that make our businesses thrive.Yet, whilst it has seemed difficult to look beyond Brexit in 2018, we are a long-term industry with a long-term future. We’ll never be in control of the big political events, but we can control how we invest in our businesses, build our brand and tackle the markets across the UK and globally. And for a country with talented producers and world class products, living in a world where quality and provenance matters, there remains much to be optimistic about over the next 10-15 years - however daunting the short-term horizon sometimes looks!

Industry View James Withers, Chief Executive, Scotland Food and Drink


Edrington’s new distillery and visitor centre at The Macallan in Speyside

Company focus: Edrington Sector: Food and drink Top 100 rank: 4

2018 was Edrington’s best-ever year. Our strategy of investing in the long term growth of our brands was demonstrated most visibly by the opening of the remarkable new distillery and brand home for The Macallan. It is an investment that is delivering not only for the brand but for Scotland, attracting international visitors to Speyside. Our primary focus is bringing our brands to life with consumer facing activities and experiences. However, the investment continues behind the scenes, in our supply chain and operations. Our business is operating in an age of unprecedented geopolitical disruption and that brings a need to focus on knowledge and skills, giving our people the tools to develop and deliver in an environment of constant change. Edrington’s greatest competitive differentiator is our heritage of giving more. We give consumers the highest quality products and the best experiences. We give more to our customers as a profitable and trustworthy partner. We support our employees in giving more to our communities. We are also proud that Edrington’s success funds The Robertson Trust, Scotland’s largest independent charitable funder.The outlook for the next year looks as dynamic as the last.

This is an era of enormous opportunity for Edrington, with more consumers in developing economies who have the means and the aspiration to explore our premium brands, such as The Macallan, Highland Park, The Glenrothes, The Famous Grouse and Brugal rum. We believe that companies who can truly connect with consumers will thrive, and in that regard, we look forward to another great year for Edrington in 2019.

Ian Curle Chief Executive, Edrington


Salmon farm, Highlands


Real estate and construction remains an important sector within the Scottish economy and often acts as a symbol for the wider macro-economic climate.

This year, the industy group’s results reflect the challenging wider economic conditions. The number of businesses making the top 100 is down from 21 in 2017 to 15 in 2018. Meanwhile, 11,674 people work for the real estate and construction firms in this year’s list - a reduction of just over 5,000 from the previous year, while EBITDA has increased from £376m in 2017 to £413m. Those businesses that are recognised this year reflect a change in direction for the industry. Greater focus on innovation and collaboration suggests the sector will continue to have a sustainable long-term future and play an important role in Scotland’s economic prosperity.

Sector focus: Real estate and construction

15 companies

11,674 employees

£413m EBITDA

Miller Homes Limited1 Robertson Group (Holdings) Limited2 Ogilvie Group Limited3

“Last year the construction sector saw a drop in output in Scotland to September 2018. There was an increase in output from the housing sector, but this was not enough to offset a fall in output from infrastructure, public sector new works and the private commercial sector. Large capital projects such as the Queensferry Crossing and the Aberdeen Peripheral Route have come or are coming to an end and the uncertainty surrounding the Brexit negotiations is contributing to a decline in private commercial work. Retail landlords are under increasing pressure to adapt their offering in light of changes with consumer spending with a number of household names entering into CVA arrangements with their landlords. Whilst there might be fewer real estate and construction companies within our top 100, those that remain demonstrate a clear focus on resilience, diversification and long-term growth planning. Companies that are able to be innovative will be more agile and able to cope better with fluctuations in demand.”

Lorraine Macphail Head of Real Estate, Scotland


As we head into 2019 with Brexit at the top of everyone’s agenda, it would be easy to paint a picture of doom and gloom for the Scottish economy. However, the underlying data from Scotland’s commercial property market would suggest that there are plenty of reasons to be positive. Looking first at investment, we saw a record £1.8bn invested across all commercial property sectors in Scotland during the first nine months of 2018 – up 46 per cent compared with the same period in 2017. Likewise, there has been a continued flurry of occupier activity in the office market throughout the year in Scotland’s two largest cities. A strong third quarter ensured that Edinburgh broke the annual ten-year average for office transactions three months early. Across the M8, Glasgow’s commercial property market witnessed a record quarter for office deals, with city centre occupier take-up exceeding 1 million sq. ft. for the first nine months.

While the road ahead will inevitably be bumpy, I believe the coming year will also present a number of opportunities for growth. For example, the retail sector’s continued travails will present a greater demand for sheds and fulfilment centres. Elsewhere the inevitability of a soft sterling will continue to present opportunities in Scotland for overseas investors. While the commercial property market is by no means the only barometer of Scotland’s economic health, I am confident that there are plenty of reasons to be positive about the state of our economy as things stand.

Industry View Alasdair Humphrey, Lead Director, JLL


Wallace Monument, Stirling

Duncan Ogilvie Chief Executive, Ogilvie Group Limited

Bill Robertson CBE DL Executive Chairman, Robertson Group (Holdings) Limited

Company focus: Robertson Group (Holdings) Limited Sector: Real estate and construction Top 100 rank: 10We have created a diversified group of companies focusing on infrastructure, construction and support services. Our business has been highly successful in continuing to adapt to changes in the market place e.g being a leading private sector investor in public sector investments and increased self delivery of key trades. We adopted a regional business model, allowing us to sustainably expand our geographic coverage and we continue to invest in our 3,300 employees and young people strategy.Our diversified business has given us the resilience to trade successfully through economic downturns and emerge stronger. The availability of bank debt has diminished in our sector over the last 5 years, however we have a strong balance sheet and cash position to fund the growth in our business plan. We have raised our profile as a significant infrastructure provider who could be trusted by clients to deliver major projects over £100m, such as The Macallan Distillery and TECA in Aberdeen.We have further advanced our strong disciplines in costing projects and undertake considerable up-front planning and diligence to mitigate project risk to enhance deliverability for our clients and avoid the unsustainable low margins.Our strong balance sheet means that we can support and enhance our relationship with clients with the provision of short and long term funding. There are significant opportunities in public and private sector framework agreements that provide long-term partnerships. Our FM business provides a high-quality service and is perfectly placed to support the increased UK demand for outsourced support services. We continue to support and invest in the strong demand to provide high quality UK private and public housing.

Company focus: Ogilvie Group Limited Sector: Real estate and construction Top 100 rank: 13Our strength lies in the diversity of the Group’s businesses and the expertise of their management teams, who are specialists in their sectors. Our construction business continues to perform solidly in a sector that faces a number of challenges. The team is focused on securing and delivering revenue from public and private sector clients and is a recognised leader in hotel, leisure and student accommodation markets. Our continued success is the result of a commitment to provide the highest standards of service to clients, partnering closely with them from the very start of every project and managing its successful delivery on time and budget. It is a process that is built on our track record of over 60 years of constructing high quality buildings across Scotland.The national skills shortage continues to challenge the sector along with increased cost of materials and there has been a slowdown in some areas of the market as developers remain cautious. We operate an ongoing programme of investment in skills and training across the workforce to maintain the high standards of delivery and customer service for which Ogilvie Group is recognised.


St James construction site, Edinburgh


Sector focus: Manufacturing and industrial

14 companies

8,861 employees

£153m EBITDA

James Jones and Sons Limited1 BSW Timber Limited2 James Walker (Leith)

Limited3

Scotland today is a dramatically different country to the one which experienced economic downturn and unemployment in the 1980s.

But there remains a strong focus on ensuring that manufacturing plays its part in future growth. Our research suggests that the sector has regained a significant foothold in the Scottish economy, taking third place in our sector league table. However, despite the generally positive long-term outlook, the data raised some cause for concern. 14 companies made 2018’s top 100 – down from 22 in 2017. Total EBITDA remains strong, but has also dipped – from £354m in 2017 to £153m. Employment opportunities has been at the heart of industry strategy in the sector, but our findings reveal that the combined number of employees has decreased from 26,886 to 8,861.

“A concerted effort has been made to reinvigorate the manufacturing and industrial sector in Scotland, with mixed success. However, it’s clear that after such a prolonged period of significant decline, rebuilding the industry will be a long-term challenge, but one that could deliver profoundly positive results, creating a more diverse economy, developing wider opportunities and rebuilding many communities that continue to pay the price for the decline of the 80s and 90s. The manufacturing and industrial businesses within our top 100 demonstrate that passion for innovation and sustainable growth and should be held as examples of how the sector has a clear place in Scotland’s future vibrant economy.”

Anita Eunson Head of Employer Solutions, Scotland


In order for Scotland’s economy to thrive, we must exploit our key growth opportunities to create the right type of jobs and generate wealth that benefits us all.Manufacturing is of huge importance to this – accounting for more than half of our exports and business research and development. The sector employs 180,000 people, offering highly-skilled jobs with median earnings 19% higher than those for the whole economy. This innovative and diverse sector boasts several world-class dynamic businesses with a crucial role to play in boosting national productivity, through embracing new technologies, committing to a truly circular economy and forging stronger links with academia. Work is already under way in these areas, with the development of both the National Manufacturing Institute for Scotland (NMIS) and the Medicines Manufacturing Innovation Centre (MMIC) – which will support businesses of all sizes, connecting them with universities and colleges.

Spirit AeroSytems in Prestwick is another shining example. Its open-access aerospace innovation centre is developing next-generation technologies and processes that will one day become industry best-in-class.But we’re not focused solely on manufacturing. Data is another key growth sector, and as part of the Edinburgh City Region Deal we’re working with partners to help the city achieve ‘data capital of Europe’ status. Other growth sectors, with which we’re working closely, include renewables, food and drink, tourism and life sciences.By supporting companies in all sectors – to innovate, scale up and create high-value employment – we are enhancing Scotland’s reputation as a highly supportive business environment, whilst helping companies achieve their ambitions.

Industry View Steve Dunlop, Chief Executive, Scottish Enterprise


Sector focus: Energy and natural resources

11 companies

14,785 employees

£296m EBITDA

For many of Scotland’s energy and natural resources companies, 2018 will be remembered as the turnaround year.

The sector had endured a prolonged period of instability, as a result of a sharp drop in oil prices, with a reduction in investment, lower activity and large job cuts. But, the last 12 months have offered some hope, with a marked rise in activity in certain areas. The nature of the sector means that many of those benefits won’t be reflected in financial results for some time. However, this year’s data makes for promising reading. 11 companies make the list – the same number as 2017. EBITDA for the top 11 companies is up significantly - from £136m to £296m. The number of employees has also risen substantially, from 7,316 to 14,785, demonstrating that long term optimism is returning, with talent retention and skills development now a big focus.

Kcad Holdings I Limited (KCA Deutag) 1 EnerMech Limited2 GEG (Holdings)

Limited3

“A strong energy and natural resources sector is key to a successful Scotland. The overall industry outnumbers any other in terms of revenue, and provides high value jobs for thousands of people. Aberdeen undoubtedly bore the brunt of the recent downturn with stalled projects, job cuts and lower investment in skills and training. It’s reassuring to see the evidence that conditions are finally improving. There is a renewed sense of optimism and a feeling that we’re making progress as a result of efficiency improvements and increased investment in the UK Continental Shelf (UKCS). Scotland also continues to play a leading role in renewable energy, driven by reducing costs that are improving competitiveness as a source of energy and generating significant investment and growth. This is providing a strong opportunity for many traditional oilfield service companies who have the relevant skills to supply this market. However, we cannot become complacent. The key to ensuring long-term growth will be a continued focus on innovation and efficiency hopefully underpinned by oil price and fiscal stability.”

Barry Fraser Head of Energy and Natural Resources, Scotland


Our industry continues to emerge from one of the most testing downturns in our history, and while challenges remain we bring 2018 to a close in a much more positive place. More projects were approved this year than over the past three years combined, including Shell’s redevelopment of its Penguin Field and BP’s field development plan for its Alligin prospect. These will result in around £3.3 billion of new investment and release more than 400 million BOE (barrel of oil equivalent) of new production.As our 2018 economic report shows, we’re seeing an improved landscape for the sector with reduced costs, competitive fiscal terms and improved operational performance. Recent fiscal and regulatory changes are helping to position the UKCS as one of the leading destinations for investment, ensuring a stable and competitive fiscal regime going forward will be crucial in maintaining this position.In the supply chain we can see that cultural change is being embedded, evidenced by our latest collaboration survey which shows that working practices have been sustained at

consistent levels since 2015. However we take none of this for granted and as we look to 2019 we must stay the course and continue our focus on improving competitiveness while maintaining a relentless focus on ensuring safe operations. Oil & Gas UK’s ambitions and priorities for the coming year are guided by industry for industry. Looking ahead to 2019, we will take a leading role in championing Vision 2035, industry’s ambition to add a generation of productive life to the UKCS and grow supply chain opportunities at home, internationally and into other sectors.Our critical role in the transition to a lower carbon economy and an increased emphasis on encouraging diversity and inclusion throughout the industry are also key focus areas for the coming year. Looking to the future, it’s clear our industry will remain key to the UK: critical for security of energy supply, supporting hundreds of thousands of highly skilled jobs, contributing billions to the economy and leading the way across the world as pioneers of our industry.

Industry View Deirdre Michie, CEO, Oil & Gas UK


Offshore oil rig

Company focus: EnerMech Limited Sector: Energy and natural resources Top 100 rank: 11

2018 has been another strong year for EnerMech. We’ve continued to grow overall, despite the UK oil and gas market facing another tough twelve months. Our key focus in recent years has been on growing internationally – particularly in the US and Australia.

Diversification into different end markets, has been another important driver of growth for us. For example, in Australia during 2018, we won significant contracts focused primarily on infrastructure. These include the WestConnex scheme which is one of the country’s largest public projects. This multi-billion dollar development involves a 21 mile, predominantly underground, motorway, and EnerMech is playing a major role in driving it forward to completion. We are also actively involved in the new Sydney Light Rail scheme.

However in the US, our directional shift has been more towards LNG and onshore pipeline infrastructure. The US offshore sector has been less challenging than in the UK, and has remained largely stable contributor to EnerMech’s business. Another area of strong growth for us in the US has been the introduction of our industrial services and electrical instrumentation business lines to this market.

Looking ahead, we’re positive about our growth targets. The political uncertainty created by Brexit is an issue we haven’t ignored, and we have carried out extensive risk assessments to ensure that we are in a strong position to face any challenges. We have a relatively small amount of work throughout the European Union, and the largest risk for us will be in procurement, and in ensuring that our staff base – particularly those from elsewhere in Europe - are not negatively impacted by any of the changes ahead.

The sentiment in the UK energy sector is definitely more positive than it has been in the last few years. There is more tendering activity and a number of new projects that have recently received approval to proceed. The nature of our business means that we won’t feel the benefits of these until their latter stages, but we anticipate a pick-up from around 2020 onwards. In the shorter term, we’re looking at diversification at home and recently picked up our first project in the nuclear sector, at Hinckley Point for EDF. The Middle East region will also be a key driver of growth for EnerMech in the coming years, with several big wins for us recently in that part of the world.

Doug Duguid Chief Executive, EnerMech Limited


Wind farm, Aberdeenshire


Neil McInnes Head of Corporate Finance, Scotland

2018 has been a very strong period for deal making, with some exceptional outcomes achieved for our clients on both the buy and sell-side. Looking forward to 2019, in spite of the economic and political uncertainty that may lie ahead, confidence amongst mid-sized companies is proving to be incredibly resilient. Valuations remain strong and the level of interest in dynamic, entrepreneurial businesses in Scotland from trade buyers and well-funded financial investors continues unabated. Particularly pleasing is the continued appetite from international corporate acquirers looking for quality, strategic Scottish targets, which I believe will provide a strong underpin for deal activity throughout 2019.We expect deal activity to remain strong across most industry groups, with the strongest interest anticipated amongst buyers in the TMT, healthcare, financial services and food and beverage sectors. We also anticipate the continued recovery of the oil and gas sector leading to an increased level of deal activity during 2019. For those companies considering a transaction in 2019, the market remains buoyant but is not without challenge, making it more important than ever to carefully plan and efficiently execute any deal. It is therefore critically important that expert advice is sought at an early stage to help navigate through the challenges that will undoubtedly arise – but do this well and 2019 could turn out to be another very successful year for Scottish businesses.From a personal perspective, Grant Thornton completed a record number of deals during the last 12 months and we continue to invest in our team to further build our capability to service our clients for the year that lies ahead. We look forward with confidence in the market as we support our clients in unlocking opportunities in the market that will help them achieve their strategic ambitions.

Industry analysis


Bill Jamieson Business and political commentator

A better year than we dared hope. Against almost all predictions, Scotland’s economic performance in the first half of 2018 was resilient – and better than the UK as a whole.

Despite gloom and foreboding about our prospects, latest estimates show growth of 0.8 per cent in this period - better than the rest of the UK. Indeed, growth over the year to June 2018 was the fastest since late 2014-early 2015. Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said it was “fantastic to see Scotland’s economy growing despite some of the uncertainty surrounding the broader trading environment.”That growth was driven by a range of industries, including distribution, hotels and catering, manufacturing, and business services and finance. Also, it was particularly encouraging to see the construction sector, hit by adverse weather in the first quarter, spring back rapidly. Here, too, the most recent figures suggest growth outstripping the UK as a whole.Meanwhile, the latest quarterly review from Scottish Engineering revealed a more upbeat outlook reflected across companies of all sizes, particularly large firms, where 40% reported an increase in optimism. All this is testament to the resilience and innovation of Scottish businesses. But adding to the Brexit uncertainty in 2019 is the prospect of a wider international economic slowdown. So this will be especially challenging for Scotland’s 395,000 private sector firms, particularly in key industries such as energy and natural resources, food and drink, financial services, tourism and the creative sector. As Andrew Howie, Managing Partner at Grant Thornton in Scotland, has pointed out, “Scotland is at a crossroads - economically, politically and culturally. The Scotland we live, work and play in today has changed radically in the last few decades.” Dialogue and greater collaboration will be needed more than ever.

Growth was driven by a range of industries, including distribution, hotels and catering, manufacturing, and business services and finance.


What now for Scotland?

The top 100 companies have all demonstrated that our country’s economy is diverse, robust and resilient. Our food and drink firms are now proudly operating on the global stage, championing brands that reflect quality, sustainability and passion. For our real estate and construction companies, a commitment to grow in a tough climate has delivered promising results. A combination of public and private investment and a desire to meet rising demand for office and residential space has laid the foundations for companies to embrace every opportunity and grow sustainably. Meanwhile, the energy, natural resources, manufacturing and industrial spaces are regaining lost ground, rebuilding and diversifying, following several years of decline. In recent years, Scotland has witnessed its fair share of political and economic uncertainty. With political dialogue and debate ongoing in Edinburgh, London and Brussels, the business community faces the challenge of planning for growth in a disruptive climate. But, we enter this period in a healthy, confident and resilient position. As the esteemed political and business journalist, Bill Jamieson, acknowledged in his contribution to Scotland Limited 2018, last year provided something of a sigh of relief, with conditions far better than we had anticipated. With collective EBITDA of more than £2.7bn, Scotland’s top 100 limited companies are demonstrating that privately owned companies with a clearly defined strategy, a focus on innovation and a commitment to grow in challenging times, are the secret to ensuring that our economy continues to flourish for years to come. Andrew Howie

Managing Partner, Scotland

Scotland Limited 2018 offers a degree of optimism and reassurance.


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